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Beware of compliance costs

Brokers that want to hold their own licence need to be mindful of the costs involved, according to Gold Seal.

Gold Seal’s director of the law compliance and regulatory specialist Claire Wivell told brokers at the Vow Financial conference in Queensland while holding an ACL is ultimately beneficial – it can be quite costly.

“If you hold your own licence, you control your destiny. You can provide whatever services you wish in the way you decide, and, subject to lenders’ requirements regarding loan submissions and borrower eligibility, you can provide them in any way you decide,” Ms Wivell said.

“No one will be looking over your should and telling you how, when, and what to do with your clients. You will be free to develop your own branding, service proposition, client relationship, management methods and manage your business as you choose.”

By contrast, brokers who opt to become a credit representative will have a “big brother” watching over them to ensure they comply with the new ASIC requirements.

“But sometimes it can be good to have a big brother – because they often absorb the costs,” Ms Wivell said.

While the final costs of holding an ACL have not yet been outlined by ASIC, Ms Wivell said it was important for brokers to understand exactly how much both options will set them back before making their final decision.